In this white paper, Onyx’s team explores the effectiveness of the CFTC COT Report in analysisng market positioning in the oil derivatives complex. Analysis suggests that for an up to date, expansive interpretation of current trader positioning for the whole
Short July 92/MOPJ 92 has been struggling to keep up with the recent strength in RBOB and there is still a firm bullish trend in naphtha. We think this will continue into the end of the month so we expect
Long Q3 EBOB Crack After initial weakness this morning hanging over from yesterday, we think it’s a good opportunity to try and fade that weakness and take an opposing position. For brokerage services across the barrel and to receive our
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
Technical fluff that has propped up Brent, thanks to a certain pair of hot hands in the North Sea, will likely
prove unsustainable.
Too close to the sun? The prompt Brent futures flat price contract recorded great strength last week. The contract began the week at $84.25/bbl and rallied past the $86/bbl handle on 21 June – where it met resistance. We now see the contract hovering around $85.30/bbl at 08:30 BST (time of writing), although we anticipate short-term bearishness to take the benchmark crude futures to $83-85/bbl by Friday. This expectation emerges out of three key factors:
Short July Arb At these levels we anticipate some physical sell side interest on the front arb, with arb opportunities becoming more favourable. For brokerage services across the barrel and to receive our weekly trade ideas: insight@onyxcapitaladvisory.com
In Asia, the Dubai players were at it again vigorously, with Petrochina playing a less prominent role while
Exxon came out swinging.
TARGET PRICE: $82/bbl – $84/bbl PRICE: $85/bbl Is Summer Demand Finally Here? The crude oil futures market is on track for its second consecutive weekly gain on signs of better demand as Brent futures rallied to seven-week highs. We initially
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
From East to West, from trading companies to majors, from Dubai to Brent, the rival BFFs are letting loose their cannonades on one another.
Short July 0.5% Sing Crack With cargos of LSFO arriving from Dangote refinery in Nigeria we have seen cracks come off. Demand is still tepid at best, so we are following the trend with this trade. For brokerage services across
Short July/Aug 0.5 Sing Oil refiners across Asia are bringing back some idled capacity after maintenance, As much as 400,000 barrels of daily capacity, or more than 10% of what was taken down last month, will return to service in
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
Long Jul Barge 0.5% Crack We have seen a rise in the Jul crack this morning. Although there has been good supply of LSFO recently, the market position has been getting longer according to Onyx CoT.
TARGET PRICE: $82-84/bbl Although we expect Brent futures to remain supported above the $80/bbl region, we hold a neutral outlook this week, with the front-month August contract to finish the week between $82/bbl and $84/bbl. This is predicated on three
Short Jul 0.5 EW Nigeria’s newly built Dangote refinery are activating their production of low Sulphur fuel oil which get exported to Singapore. This could weakened the east by increasing an already oversupplied market. This is also supported by the
Short Jul 0.5% Sing Crack According to market and ship tracking data, Singapore, Asia’s main oil hub, is set to receive this week the first cargo of low-sulfur straight-run fuel (LSSR) oil exported from Nigeria’s newly built Dangote refinery. There
Long Jul NWE Naphtha Crack Naphtha cracks have held firm despite weaker gasoline and stronger flat price, so we think there is still an overhang of gas/nap length keeping naphtha supported, so we’d suggest following the recent trend higher For
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
Short Jul Euro Hi5 Demand for HSFO in Europe has seen a slight uptick lately, with higher bunkering requirements ahead of the summer as the main factor behind the recent HSFO strength. LSFO consumption across Northwest Europe and the Mediterranean
TARGET PRICE: $78-80/bbl We expect Brent to trade on either side of $80/bbl this week, with a slight bearish bias. We are looking for the front month August contract to finish the week between $78-80/bbl. This call is predicated on
Brent trumped bearish macro sentiment and the EIA stats.
The likely unwinding of stretched short positions trumped bearish drivers this week, driving Brent above our end-week target.
Long Aug 380 E/W With the Middle East already suffering from high summer temperatures and drawing in a lot of HSFO for generating power, we expect to see demand increase in the East for Aug. Inventories have improved in Singapore
Long the Jul/Aug 92 spread This spread got to highs of 55 , but then got pressured down to 35 levels due to physical selling and profit taking. The 92 complex has been supported in the front, due to
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
Short Jul/Aug 3.5 spreads Demand in Europe is still tepid alongside ample stockpiles, as we get closer to summer cooling season, demand shall pick up and inventories should fall. Alongside this, Jul/Aug 3.5 Barges is trading high in the overbought
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
Asian low sulphur fuel oil market structure has weakened over the last couple of days of June, with cash differential for the marine fuel grade dropped to a five-week low amid competitive offers and weaker deals for June-loading physical cargoes. There is persistent lacklustre bunker demand in Singapore, which is expected to see additional supplies coming from Europe in the coming weeks.
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
Long Jul 380 Crack With recent U.S data released it has implied the U.S economy is experiencing more contraction which has put aggressive downward pressure on Brent, with demand for 380 increasing supported by prompt spread buying, we believe the
In ‘The Officials’, Onyx Capital Advisory publishes outright values, spreads, cracks and boxes for the main energy commodities traded in the marketplace. The published values are determined independently and on a fair market basis by our team of dedicated professionals.
Onyx Capital Group is proud to announce the launch of ‘The Officials’, a publication highlighting and providing fair values for the main derivative energy markets.
Onyx is delighted to welcome Harry Tchilinguirian as Group Head of Research. With an illustrious career spanning over three decades in research within the commodity markets, there is nobody better equipped to take on the unique and specialised role as
The upper 60s came and went, with the initial negative narrative being overtaken by ‘it is not so bad and we are going to:’ 75, 77, 80 or even more. Take your pick. But the macros have not changed and, if anything, they are a wee bit worse and everything works at the margin. So be careful. In flat price the story has been pretty directionless to stronger. A random walk along the flat price chart saw a slow morning, before picking up steam into the early hours of US trading. According to traders, Exxon has been selling alongside Chevron, a Team America defector, and shortly before the window they may have got their way, with flat price and spreads both easing off. As flat price reached the day’s peak at $73.31/bbl, Brent front spreads peaked at 66c just after 15:00 BST, before shedding 8c to close the window at 58c. Further down the curve, little changed. But the short end remains strong. One trader said, “we are no way oversold or pricing below where we ought to be”, even despite the historic short positioning in managed money. But for every short, there is a long, so…
The Nov’24 Brent futures fell below $70/bbl on 10 Sep, reaching lows not seen since December 2021, before recovering to around $73/bbl by September 16, despite an oversold RSI and declining open interest. Meanwhile, the US 2-year treasury yield and Brent broke key support levels following hawkish BOJ comments and political developments, with the OIS now pricing in a more aggressive US Fed interest rate cut, indicating a potential recession. ICE COT data for the week ending September 10 shows money managers turning bearish, reducing speculative longs by 19.7% and increasing shorts by 15.5%, resulting in net positioning in Brent futures turning negative for the first time and the long:short ratio dropping to 0.80:1.00 for all weeks to 2013.
Money managers remained bearish in the benchmark crude oil futures over the week ending 10 Sep, most notably in Brent futures, with the front-month contract dipping below $70/bbl on 10 September.
It’s the positioning in Brent contracts that is really intriguing this morning. Managed money net length in Brent futures contracts, according to ICE COT, has turned negative, marking a historic shift in sentiment on the long/short seesaw. For the first time since the data began being collated, some of the shorts are outweighing the longs. The composition is clear with -33.7 mb net short for the week ending 10 Sep. Shorts look a bit saturated…
Flat price has largely shrugged off APPEC’s bearish consensus; the market was overly short, really. Flat price and spreads all gained through the backend of the week and traders reported that next week, they’re “not really seeing any selling”, but they followed up that the two subsequent weeks have lots of selling. In short, the market is backwardating. Let’s not understate this: implied diffs are $1.30 for next week, little changed from where we are now, but the week after, they’re pricing 80c!! The market is teetering on the clifftops, Kennie had better have his parachute. There’s still plenty of trading time, so who knows? Nobody…
Saudi allocations to Chinese refiners for October have jumped. Before we get into the details note the increase is in sharp contrast with the output stability narrative by OPEC. Key question to Saudi Arabia: if you are not hiking production, why are you increasing allocations to your customers? According to sources, Unipec got 14.5 mb for October up from 11 mb for September. Rongsheng, the favourite of the bunch, remains the primary recipient, at an unchanged 16 mb. These two take the lion’s share of supply. Total allocation grew to 45.5 mb in October, from 43 mb in September, just shy of the 3 mb increase we expected. As we’ve been saying, China doesn’t need much crude to fulfil its ailing demand, so where is this all going?
Blimey! Brent’s surge into the European close burst up beyond the last few days’ levels to carry us firmly back into the $72/bbl range. The bears went too deep into enemy territory and now they have to pay up! The super-short market will be feeling the pinch from this afternoon and we’re sure some will be kicking themselves for jumping on the bandwagon of $60 Brent too early.
Nov Brent futures premium over Dubai partials has inverted in recent sessions, with Dubai, “oddly outperforming” according to one trader. Today Brent reclaimed some ground. Weak macros have failed to shake prompt strength out of Brent; front spread rose to 53c of backwardation. Consensus from APPEC was overwhelmingly negative, OPEC let a little air out of their ballooned demand forecast, and today the IEA revised down their demand forecast for 2024, it’s not a pretty picture. With very few trading months left for 2024 oil, where is the strength coming from?
In addition to our regular Monday CFTC COT analysis report, Onyx Insight will publish its own in-house CFTC COT forecast ahead of the official Friday report. The model forecasts changes in long and short positions using machine learning, utilising Onyx’s proprietary data.
The signals for emerging surplus are coming in. Everywhere you look the curve has flattened. From Dubai to the North Sea, benchmark grades are struggling to muster even the slightest backwardation. The flattening has been particularly acute in Brent. Yesterday time spreads down the curve dipped their toes into a bearish contango. At 76c, Dec/Dec spreads closed the weakest in over 3 years. Compared to three months ago structures are starkly different.
The signals for emerging surplus are coming in. Everywhere you look the curve has flattened. From Dubai to the North Sea, benchmark grades are struggling to muster even the slightest backwardation. The flattening has been particularly acute in Brent. Yesterday time spreads down the curve dipped their toes into a bearish contango. At 76c, Dec/Dec spreads closed the weakest in over 3 years. Compared to three months ago structures are starkly different.
Traders were hoping for a quiet day going into the weekend but instead they got a comatose or nearly dead oil
market. At 15:00 BST Nov Brent stood at a consolidated $73.40/bbl, slightly above its level at yesterday’s close.
Then, however, markets went into freefall. Within the hour, Brent had toppled down by almost $2/bbl, to around
$71.50/bbl. Disastrous Canadian PMIs? Americans selling off? Or just the dour macros weighing down
everyone’s souls? And then in come the Saudis, slashing their monthly OSPs across the board for October
against the preceding month’s differentials. All grades into the Med and Northwest Europe received 80c cuts. In Asia, Arab Light and Medium took a 70c and 80c hits respectively, while Heavy was slapped with a full $1 cut.
Traders were hoping for a quiet day going into the weekend but instead they got a comatose or nearly dead oil
market. At 15:00 BST Nov Brent stood at a consolidated $73.40/bbl, slightly above its level at yesterday’s close.
Then, however, markets went into freefall. Within the hour, Brent had toppled down by almost $2/bbl, to around
$71.50/bbl. Disastrous Canadian PMIs? Americans selling off? Or just the dour macros weighing down
everyone’s souls? And then in come the Saudis, slashing their monthly OSPs across the board for October
against the preceding month’s differentials. All grades into the Med and Northwest Europe received 80c cuts. In Asia, Arab Light and Medium took a 70c and 80c hits respectively, while Heavy was slapped with a full $1 cut.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in fuel oil and gasoline swaps. Our weekly Onyx Alpha report presents speculative and hedging trades based on technical analysis and data-driven tradecraft methods on Onyx Commitment of Traders (COT) and Flux Financials data.
Traders were hoping for a quiet day going into the weekend but instead they got a comatose or nearly dead oil
market. At 15:00 BST Nov Brent stood at a consolidated $73.40/bbl, slightly above its level at yesterday’s close.
Then, however, markets went into freefall. Within the hour, Brent had toppled down by almost $2/bbl, to around
$71.50/bbl. Disastrous Canadian PMIs? Americans selling off? Or just the dour macros weighing down
everyone’s souls? And then in come the Saudis, slashing their monthly OSPs across the board for October
against the preceding month’s differentials. All grades into the Med and Northwest Europe received 80c cuts. In Asia, Arab Light and Medium took a 70c and 80c hits respectively, while Heavy was slapped with a full $1 cut.
The Nov’24 Brent futures contract capitulated over the past week as bearish sentiment mounted. Prices fell by over 5% to their lowest level this year, only finding support at the $71-72/bbl level. Traders shifted their focus towards economic concerns, with the expectations of the resumption of Libyan supply and poor Chinese demand weighing on sentiment. Not even OPEC+ delaying their production hikes could reverse the tide as it confirmed the worsening demand outlook. Although futures market positioning is at historically short levels, there could be further room for prices to fall as the $70/bbl psychological support level looms large.
Traders were hoping for a quiet day going into the weekend but instead they got a comatose or nearly dead oil
market. At 15:00 BST Nov Brent stood at a consolidated $73.40/bbl, slightly above its level at yesterday’s close.
Then, however, markets went into freefall. Within the hour, Brent had toppled down by almost $2/bbl, to around
$71.50/bbl. Disastrous Canadian PMIs? Americans selling off? Or just the dour macros weighing down
everyone’s souls? And then in come the Saudis, slashing their monthly OSPs across the board for October
against the preceding month’s differentials. All grades into the Med and Northwest Europe received 80c cuts. In Asia, Arab Light and Medium took a 70c and 80c hits respectively, while Heavy was slapped with a full $1 cut.
Money managers retraced from last week’s bullish positioning to incredible bearishness in the week ending 03 Sep. We saw long-positioned managed-by-money players trim over 32.6mb from their combined positions in Brent and WTI futures (-8.27%) while their short-positioned counterparts added over 73.2mb (+49.27%) their shorts in the benchmark crude futures contracts. This change took the combined long:short ratio for the crude futures to 1.63:1.00 this week, below the 1st percentile for long:short ratios for every week since 2013.
Traders were hoping for a quiet day going into the weekend but instead they got a comatose or nearly dead oil
market. At 15:00 BST Nov Brent stood at a consolidated $73.40/bbl, slightly above its level at yesterday’s close.
Then, however, markets went into freefall. Within the hour, Brent had toppled down by almost $2/bbl, to around
$71.50/bbl. Disastrous Canadian PMIs? Americans selling off? Or just the dour macros weighing down
everyone’s souls? And then in come the Saudis, slashing their monthly OSPs across the board for October
against the preceding month’s differentials. All grades into the Med and Northwest Europe received 80c cuts. In Asia, Arab Light and Medium took a 70c and 80c hits respectively, while Heavy was slapped with a full $1 cut.
Ennui is such a good word to describe the feeling sparked by the dated Brent market. Finally, things start to calm down and go into a reasonable direction where weakness or strength is reflected across all instruments. Equinor continues to increase the profile of Johan Sverdrup like they have bigger plans for the crude stream and sold a cargo loading Oct 1-3 to BP at Dated flat. A boring price but we like boring.
Ennui is such a good word to describe the feeling sparked by the dated Brent market. Finally, things start to calm down and go into a reasonable direction where weakness or strength is reflected across all instruments. Equinor continues to increase the profile of Johan Sverdrup like they have bigger plans for the crude stream and sold a cargo loading Oct 1-3 to BP at Dated flat. A boring price but we like boring.
Dubai’s physical premium has averaged $2.01/bbl so far in September, compared to the 90c in the full month of August. On a flat price basis, the market flatlined today. There’s still a lot of danger for the longs if the right noises are not made by OPEC and friends. OPEC’s life support isn’t working, with Dubai partials gaining 2c and front-month Brent futures losing the same, down at near 14-month lows. Despite some chaotic news announcements about OPEC quotas, Kennie and other long trades have never woken up from their comatose state.
In addition to our regular Monday CFTC COT analysis report, Onyx Insight will publish its own in-house CFTC COT forecast ahead of the official Friday report. The model forecasts changes in long and short positions using machine learning, utilising Onyx’s proprietary data.
Bad macros finally killed those with narrow focus on supply disruption stories in the face of continuing
loadings and also those believing fantastic stories of demand growth in the 2 mil bbl range.
Hello, wake up everybody; the world economy is soft and you know it, you read it everyday, you see it, you
feel it. You just want to believe your own story or that being fed by producers. What do you expect? That a
producer or group of producers, or long traders are going to tell you the demand growth isn’t there?
Dubai’s surge relative to Brent marches onward. Dubai partials minus front month Brent futures inverted,
going positive for the first time since 10 July, at 9c by the close of Asia today, while on a physical premium
basis, Dubai remains elevated at 2 bucks. While Brent futures spreads and CFDs get hammered in Europe,
Dubai’s prompt structure remains strong, and Dubai continues to outperform. The window was quiet, and
traders were tentative following the overall downward flat price correction. But Vitol and Mets still picked up
some partials from PC and Exxon. Anybody with a sense of end-user demand should sell, of course.
We said yesterday that the market really wanted to go up, regardless of fundamentals. Seems like bulls were too attached to Libya or to some fluffy nonsense as Libyans really need the money and so they’ll find a way to accommodate and keep the cash flowing. Remember technicals are noise but macros always win in the end and macros are super bearish – we say this with in situ reporting from China.
Dubai surged relative to Brent, closing the spread. China is widely seen as underperforming but the weak
picture as we enter the fall is not translating into softer Asian benchmarks. Dubai is the outperformer so far in
September. The prompt weakness in the Dubai we saw throughout the back end of August has been left in
dust after expiration. Vitol continued to bid and are seen as winning with Dubai physical premia rising to over
two bucks in the first two trading days of September.
Another week brings another selection of new trade ideas from Onyx Research, this time looking at trades in naphtha, LPG and crude oil. Our weekly Onyx Alpha report presents speculative and hedging trades based on technical analysis and data-driven tradecraft methods on Onyx Commitment of Traders (COT) and Flux Financials data.
The $80/bbl Battleground – Front-month ICE Brent futures moved sideways during August, unable to break out of a circa $76-83/bbl range. Geopolitical swell-ups and weak economic news, raising concern over oil demand, notably out of China, took turns pushing the flat price, respectively, up and down. Neither driver got the upper hand to set Brent on a new trajectory, with Brent’s price generally reverting towards $80/bbl. Even as Jerome Powell…
Boom! Brent flat price blazed a trail back up from the meagre sub $79/bbl handle it had been holding since yesterday evening to bound up to the $80/bbl level with a huge jump through the afternoon. But almost as quickly as it rose up, it got smacked back down again by almost 90c. According to a trader Brent “basically gapped down on nothing” and was “just following spreads”. The longs who took their winnings beforehand will be feeling pretty pleased with their afternoons and get a cosy night’s sleep on a big pillow of bank notes.
The Nov’24 Brent futures contract began strong last week, reaching $80.15/bbl on 26 Aug amid thin liquidity from players exiting for the bank holiday in the UK. This strength was also attributed to supply outages in Libya.
Boom! Brent flat price blazed a trail back up from the meagre sub $79/bbl handle it had been holding since yesterday evening to bound up to the $80/bbl level with a huge jump through the afternoon. But almost as quickly as it rose up, it got smacked back down again by almost 90c. According to a trader Brent “basically gapped down on nothing” and was “just following spreads”. The longs who took their winnings beforehand will be feeling pretty pleased with their afternoons and get a cosy night’s sleep on a big pillow of bank notes.
Money managers were more bullish in the crude futures benchmarks in the week ending 27 August. In both Brent and WTI futures we saw an addition of long positions and a liquidation of short positions. Bullish sentiment was boosted in crude futures as investors became more sanguine about economic growth prospects following Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium, as he hinted towards the beginning of a rate easing cycle from the next meeting in September. Moreover, supply disruption concerns mounted as Libya’s eastern-based government announced the closure of all oil fields which halted production and exports.
Boom! Brent flat price blazed a trail back up from the meagre sub $79/bbl handle it had been holding since yesterday evening to bound up to the $80/bbl level with a huge jump through the afternoon. But almost as quickly as it rose up, it got smacked back down again by almost 90c. According to a trader Brent “basically gapped down on nothing” and was “just following spreads”. The longs who took their winnings beforehand will be feeling pretty pleased with their afternoons and get a cosy night’s sleep on a big pillow of bank notes.
Boom! Brent flat price blazed a trail back up from the meagre sub $79/bbl handle it had been holding since yesterday evening to bound up to the $80/bbl level with a huge jump through the afternoon. But almost as quickly as it rose up, it got smacked back down again by almost 90c. According to a trader Brent “basically gapped down on nothing” and was “just following spreads”. The longs who took their winnings beforehand will be feeling pretty pleased with their afternoons and get a cosy night’s sleep on a big pillow of bank notes.
